The U.S. is suffering from an inflation problem with coffee. In 2025, arabica and robusta prices rose to highs not seen in several years.
The government posted coffee prices rising by 20.9% Y/Y in August. A drought in Brazil, unfavorable crop conditions in Vietnam, and ongoing strong demand lifted coffee prices.
Tariffs against Brazilian coffee sources did not help, either. Consumers should expect volatility in coffee prices to continue. Coffee importers had to pay for the higher costs or share those costs with consumers.
J.M. Smucker (SJM) is facing such cost pressures. In the last quarter, the company warned shareholders that it needed to mitigate higher costs for green coffee. It needed to find alternative suppliers in May and August.
More recently, shares of Starbucks (SBUX) gave back gains made from June and July, when shares traded close to $100. SBUX stock closed at $84.37.
Dutch Bros (BROS) lost nearly 10% of its value in the last week. Investors are bracing for a steep drop in demand after the inflation report on coffee.
McDonald’s (MCD) also pulled back. The $285 to $320 uptrend is now over. MCD stock closed at $303.29.
Donuts, which Krispy Kreme (DNUT) sells, complement coffee. DNUG stock, however, faces a 24.68% short float from bears.
Keurig Dr. Pepper (KDP) trades near a 52-week low. It is buying JDE Peets and spinning off its coffee division. The acquisition comes at an uncertain time for the coffee market.
